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Pension changes could cost NHS ‘billions’

1 August 2013

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NHS Employers has warned that proposed pension changes could cost the NHS an extra £1.7 billion.  

Responding to a Treasury draft paper, the organisation said pension contribution increases would influence service delivery and patient care.

The Treasury has suggested increasing the current pension contribution from 14% to 18%, meaning that employers will have to contribute more to each employees pension. 

However, no additional funding will be provided, leading to serious cost pressure on NHS organisations and the potential for job losses, NHS Employers claims. 

NHS Employers head of pensions policy told Management in Practice that the changes could cost at least £7.2 million to a medium sized NHS trust.

She said: “In general practice the biggest issue is that the employer would have increased liability. If the pension contribution is raised they would have to pay that on behalf of their workforce – whether it’s one person or 99.

“Finding £7.2 million out of existing resources will have cause potentially significant problems with service delivery.” 

The full letter to Her Majesty’s Treasury is available here. More information on the 2015 Pension Scheme Review is available here